Funds Insights From Luxembourg

The last week of June and the first week of July saw two interesting fund services focused conferences in Luxembourg: 0100 conference on Collecting Executive Insights from European Mid and Large Cap Private Equity and Knect365 UCITS & AIFM Luxembourg conference.

Anja Grenner, Director in Funds in our Luxembourg office, moderated a panel discussion about fundraising in the first and joined the panel on Launching in Luxembourg in the second conference. Here's a brief summary of the main discussions and findings from both panels.

0100 Collecting Executive Insights from European Mid and Large Cap Private Equity - panel discussion on fundraising

Particularly smaller and medium sized US funds do not offer their funds to European investors anymore due to difficulties imposed on them by the Alternative Investment Fund Management Directive (AIFMD). This is particularly a problem for globally investing funds of funds. One of the largest challenges today are co-investment programs run by funds, letting their investors directly co-invest in the target companies and thereby negotiating better terms than via the investment through the fund. Similar challenges pose co-syndications, i.e. loan syndications, where not only the classic loan syndication agents (traditional banking institutions) intervene, but also private equity funds. The development of permanent data rooms, whereby funds provide investors permanent access to their data, was seen as a sign of the industry becoming more investor-driven. Lighter due diligence processes for repeat investors and specific terms for different classes of investors were seen as other signs of the increasing power of investors. At the same time these developments also show a growing concentration of fund managers on a select number of investors, instead of accepting any and all investors. Environmental, Social and Governance (ESG) factors were confirmed by all participants as now an established part of the selection process when investors choose their fund investments. ESG definition, reporting standards and harmonisation across the industry will likely become an important topic in the next year. Panel participants included: John Holloway, Director Institutional Asset Management @ European Investment Fund Gilles Collombin, Partner...